An article in The Economist reported that prices of CDs in Britain was much higher than prices in the United States or other European countries. There were only a few major companies, and a report from a Parliament committee said there was no serious price competition. The best explanation for this is that
a. the industry was a contestable market.
b. there were entry barriers in production and distribution of CDs.
c. firms were avoiding profit opportunities.
d. there were substantial differentiation of product.
b
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The opportunity cost of doing something can be defined as the value of the next-best alternative
Indicate whether the statement is true or false
When the marginal product is increasing as the quantity increases, then as the quantity increases, the
A) average product is decreasing. B) marginal cost is decreasing. C) total cost is decreasing. D) total product is decreasing. E) fixed cost is increasing.
Refer to the table above. Suppose that in normal years demand is represented by Case 2 and supply is represented by Case B. In a normal year the equilibrium quantity of wapanzo beans will be
A) 2 million pounds. B) 4 million pounds. C) 6 million pounds. D) 8 million pounds.
The big tradeoff between equality and efficiency exists because
A) redistribution uses resources and weakens incentives to work. B) redistribution uses resources and strengthens incentives to work. C) redistribution creates additional resources and weakens incentives to work. D) redistribution creates additional resources and strengthens incentives to work.